Investor clubs not scared of turbulence

Members keep positive outlook on market

SAN ANTONIO (AP) Inside the party room of a North Side Denny's restaurant, 14 women -- mostly retired teachers -- are crowded around a table poring over company earnings reports.

The stock their organization -- the Alamo Women's Investment Club --bought of automated teller machine maker Diebold hovered in recent weeks between $20 and $30, down from its high of almost $43 in May.

The women compare reports on why Diebold has cratered and decide the long-term prognosis for the company still is good. No reason to worry, although one woman draws the assignment of calling Diebold's investor relations department to request further data.

When talk turns to the market turbulence since August, the outlook still is positive.

Although many of the club's stocks have taken a drubbing, the women of AWIC aren't going to let a 900-point downturn in the Dow Jones industrial average chase them away from the market.

''I was thinking when the market went down: 'Let's buy some more!' '' said Olga Fischel, a member of the 18-month-old club.

Let the ''seasoned'' investors panic.

AWIC is in this for the long-haul.

And so, for that matter, are San Antonio's other investment clubs.

The clubs, which proliferated nationally in the bull market of the past three to four years, generally are composed of casual investors who pool their money together to buy stocks and learn how to make better investments.

''When we started this club we had a lot of discussions about how there would be some fluctuations,'' said Jane Barclay, president of The Wealthy in Training, a year-old investment club of San Antonio Water System employees. ''The consensus of opinion is we aren't going to let this scare us away. We're still optimistic.''

While panic selling was rampant in the market during August and September, members of local investment clubs said they view the market with a long-term perspective. They buy quality stocks and hold them.

Indeed, some view it as a chance to stock up on securities at a discount.

After retailer AutoZone's stock hit the skids, falling from a high of more than $37 in early July to a low of $21.50 in early October, the 12-member Liberty Investment Partnership decided the downturn was an opportunity to boost their holdings in the company.

''(AutoZone)'s stock is in the tank right now, but it's still a good company,'' said Liberty's president, Esther Curnutt. ''That's the kind of investment opportunity we look out for.''

The guidelines which many of the clubs use to evaluate potential investments steer them away from risky, unstable companies, Curnutt added. As a result, their stocks tend to weather market drops better than those of less-stable companies.

''This is real safe stuff,'' said Curnutt. ''We're not rolling the dice when we invest. We don't mess around with the high-flyers, just companies that are good, solid investments.''

Many of the clubs use a list of standards developed by the National Association of Investment Clubs, a non-profit group that helps start investment clubs.

There are 2,500 members of the NAIC in San Antonio and surrounding areas belonging to an estimated 125 clubs, said Al Molter, president of the South Texas Council of the NAIC. That's up from about 1,100 members in 1994, when the San Antonio NAIC council also included all of South Texas.

''The publication by the Beardstown Ladies had a lot to do with the growth,'' Molter said. ''They were able to do very well and it was highly publicized nationally.''

The Beardstown, Ill., investment club, formed in 1991, impressively outperformed Wall Street and consequently published best-selling books of investment advice. Although it was later discovered the Ladies' returns were less than first reported, the investment clubs that formed in the wake of their success are still sold on the idea.

But, this isn't just a case of copycat capitalism. There are other factors driving the phenomenon, club members said.

''We're all looking at retirement,'' said Laura Puchis, a member of San Antonio's fledgling Vision Investment Club, which made its first stock purchase in April. ''We want to make sure we aren't stuck working another five years so we have money to retire with.''

Making money is naturally high on the clubs' list of priorities, but club members said their main attraction is educational.

Investment clubs offer a hands-on chance to learn the stock market with a minimal investment. That, in turn, helps members when they put together their own private investment portfolios.

The members of Alamo Women's Investment Club, for example, invest only $50 a month through the club.

But, every woman in the club also has put together a private portfolio using knowledge gained from the club. Several also have purchased computers after learning how to operate them in the club.

A few local clubs have lost membership during the market downturn. However, the departures have been due to health problems, moves or family obligations and not cold feet over the market, club members said.

At their recent meeting, AWIC's members voted unanimously to impose a fine on members who miss an excessive amount of meetings. Hardly the actions of a group not in the market for the long-term.